Mark Sebastian founder of Option Pit, and CIO of Karman Line Capital
FOCUS: U.S. stocks, indices, options
Top Picks: Intel, Occidental Petroleum, Qualcomm
MARKET OUTLOOK:
It’s interesting that the S&P 500 Index is just off an all-time high after blowing the doors of on Thursday. Meanwhile, the QQQ is five per cent off the top because the Magnificent Seven are running out of steam. Apple has been strong but the rest of the group has been weak. It appears the market is in a serious rotation we are seeing names like GE and Carr explode while MSFT treads water.
In an environment where rates are dropping one has to like smaller names like the IWM or energy. I continue to think the world is over concentrated, if you are long QQQ and SPY equally you are 60 per cent invested in eight stocks. Of the mega caps, the one I would own is AMZN which is at a historically low price-earnings ratio (PE) for AMZN.
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TOP PICKS:
The fabrication business is worth more than the whole company.
Occidental Petroleum (OXY NYSE)
The stock is in the toilet oil is going to win in falling rates.
It has Apple issues but when you look at multiples on chip stocks this one is cheap.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| INTC NASD | Y | N | N |
| OXY NYSE | N | Y | N |
| QCOM NASD | Y | N | N |
